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Rivals Under One Roof

Alejandro Valverde finished ahead of Alberto Contador in the Ruta Del Sol last weekend. The two Spaniards are rivals but have plenty in common, from nationality to anti-doping bans. What you might not have noticed is that both ride bikes made in the same factory.

But “Alberto Contador rides a Trek and Alejandro Valverde rides a Canyon” you might say. You’d be right. Both companies use a firm called Quest Composite Technology based in Dongguan, China to make some of their premium frames.

Quest’s website, with English pages, is open about this with lots of images of Trek and Canyon product on their pages, as well as the Louisville Slugger baseball bat.

The same company doesn’t mean products by Canyon and Trek are the same with only cosmetic touches like paint or decals. Far from it, looking more into things it even appears that Quest has “silos” of staff with a set tasked with R&D, manufacture and service for Trek; and another silo of staff doing similar roles for Canyon. As such Trek and Canyon’s frames are not the same and let’s put that in bold to make sure nobody gets confused.

The idea of the Original Equipment Manufacturer (OEM) manufacturing parts or even whole goods on behalf of another firm is an established one but normally something that’s kept quiet. Should we acknowledge the shared manufacture more? Probably not if you’re a brand manager needing to separate your product from the crowd. Indeed it’s a surprise to find Quest’s website so full of shared Trek and Canyon imagery.

But it’s not so uncommon in cycling where various frame brands point to outside influences, for example Pinarello boasts of its carbon fibre from Japanese manufacturer Toray just as a vintage steel frame would come with a label from Columbus or Reynolds to show who actually made the tubing. If a brand is willing to say what its frame is made from, then is a the logical next step is to acknowledge how it was made? Here it’s harder because the brand still needs to control the intellectual property of its unique design. The risk is people make the short cut and equate “same OEM” to “same product” when a shared OEM doesn’t actually mean that (hence the bold text above) because it all depends on the specifications, one firm might insist on a superior resin; another uses more hand-made carbon lay-ups; another uses the latest moulding technology and that’s before we get to the design differences like aerodynamics and integration with components. So while it’s true that informed consumers make informed choices, all the info available in public here is the same OEM rather than identical carbon, resins, lay-ups, moulding and so on. Still in a recent Canyon frame review on cyclingnews/Bikeradar the author made a comparison to Trek “perhaps the toughest current rival to the Ultimate Evo is the Trek Émonda SLR 10” which is telling if there are links to the same factory, no? At the very least it’s a commendation for Quest.

Another reason for the hush is that “Made in China” still has mixed meanings. Last year the BikeBiz website had a great article on the production of frames in China and used three labels to describe frame manufacturing in China: cream, competent and cowboy. The cream refers to the likes of Quest, not mentioned by name in the piece but the kind of firm making premium frames at the pinnacle of the market. Competent makers are producing for mid-ranking brands. The cowboys are probably behind those too-good-to-be-true frames you see on websites like Ebay or Alibaba. The Bikebiz article lists various OEM manufactuers: “Keentech Composite Technology, which makes carbon frames for Cervélo. G&M Carbon Components makes for BMC. Pinarello frames are made by Carbotec Industrial of Taiwan and China, in the carbon business since 2004. Scott… …in the Giant factory” and these are all examples of the cream of the crop, for the record Keentech is a subsidiary of Taiwanese firm Topkey which makes some Specialized, Merida and Cannondale according to their website (which means in theory it’ll be possible to have a race with a top-5 all on Topkey manufactured frames). Anyway the point here is you can have some of the best products in China alongside the fakes and fails so the label remains altogether less reassuring than, say, Made in Switzerland.

The “Made in China” label is slowly going up market. Once upon a time the phone in your pocket might have be from a European brand like Nokia or Ericsson, today Chinese smartphone brands like Huawei, Xiaomi or Lenovo proliferate and have plans to tackle market leaders Apple and Samsung. Now that the technology to make these goods is established in China, the Chinese owners of the capital can continue to contract their plant to make goods on behalf of “Western” brands but they’ll look on with envy at the margins and maybe decide to make their own brand frames too. It’s not far-fetched, indeed the likes of Merida started out manufacturing for other brands and now have their own product lines and brands which goes as far as the World Tour. Factor Bikes sponsor Ag2r La Mondiale too and this is an interesting case study of start-up brand without the European heritage but it still needs to sponsor a Euro team.

Conclusion
Made in China? A lot of bikes are. It’s not so common to mention some are made under the same roof in China. You probably saw that Alejandro Valverde and Alberto Contador finished 1-2 in the Ruta Del Sol but the fact that their bikes are made by the same company is something that’s not so widely known. Their bikes are different but it’s a reminder of the silent supply chains behind the sport and it’ll be interesting to see if any of these “cream” manufacturers launch their own brands.

Photos: Vuelta a Andalucia website, Quest Composites website

Comments on this entry are closed.

  • AK Monday, 20 February 2017, 3:43 pm

    Giant is perhaps the most successful of eastern brands that has gone from making things for others to exporting to the west in their own name.

    • channel_zero Monday, 20 February 2017, 7:03 pm

      Giant was Schwinn’s OEM for years until something changed in the relationship that lead Giant to enter the U.S. market, decimating Schwinn’s declining business fortunes. I don’t remember the details.

      We would have to see some steep business declines in the fortunes of both Trek and Merida for an OEM to decide to brand their own product. Merida getting the best of Trek annually because of the enormous business advantage of running an export business in Taiwan/China.

      There are other factors at play too. OEM contracts normally have non-compete agreements as well that prevent the OEM from starting their own business. Also worth mentioning is the extreme challenge of creating and marketing your own product to a worldwide customer base.

      • AK Monday, 20 February 2017, 9:51 pm

        Wasn’t it Specialized that got back-stabbed by Giant, meaning they first were their manufactiring partners and later turned into competitors releasing very similar products under their own name? Specialized were not happy with that and so then turned to Merida but made sure they set up the contract such that Merida would not enter the US market. Not that that matters anymore since Merida owns Specialized 49%. Forgot where I read the bit about Giant and Specialized and cannot find it back so maybe it is just folklore. If it is true, it’s quite ironic, given that Specialized became a big company by almost exactly copying the Ritchey/Fisher mountain bike design and having it produced in Taiwan for a lot less.

        • Larry T Monday, 20 February 2017, 11:03 pm

          M owns 49% of S (which it’s said they took after S ran up a big bill they couldn’t pay) but spends $$ to put a pro team on bikes with M’s on them who then races against teams with S on their bikes. And the big stars on all these teams probably end up at a place like Sarto to get something made that fits – but of course with the big-buck sponsor’s brand name slapped on.
          Same as it ever was.

        • Alan Tuesday, 21 February 2017, 3:53 am

          I’ll strongly dispute the phrasing of the statement “exactly copying the Ritchey/Fisher mountain bike design.” Long under-appreciated pioneer Charlie Kelly worked with Gary Fisher on designs by Tom Ritchey, together. Sinyard saw that this was the wave of the future and hired Kelly away.
          Reference: http://www.biketourfaq.com/bike-touring/brief-history-mountain-biking/

          No need to be so dismissive of their contributions.

          • AK Tuesday, 21 February 2017, 11:52 pm

            I knew about Kelly being part of MountainBikes. Should have mentioned his name as well indeed, I didn’t because I didn’t think it would ring a bell with most of the road bike oriented readers here. I never knew he worked for Sinyard though. Neither he nor Fisher nor Sinyard mentions this in Klunkerz, as far as I recall. I also checked Wikipedia, for what that’s worth, but that says he left MountainBikes in 82, so well after the Stumpjumper hit the shops,and makes no mention of his time at Specialized.

          • Repack Rider (Charlie Kelly) Sunday, 26 February 2017, 6:26 pm

            STOP RIGHT THERE.

            I never worked for Specialized. I wrote the definitive history of our sport, and anyone who reads it will know what happened to me. I only had the greatest bicycle adventure of the 20th Century. My book is “Fat Tire Flyer: Repack and the Birth of Mountain Biking.”

            AND I NEVER WORKED FOR SPECIALIZED.

  • Shearman Monday, 20 February 2017, 4:02 pm

    Fascinating – thank you.

  • Kieran Monday, 20 February 2017, 4:11 pm

    Quest Bikes doesn’t sound too bad. This type of model also used for titanium bikes, looking into it myself for a bike.

  • Sam G Monday, 20 February 2017, 4:13 pm

    Made under the same roof, yes. But the as inrg points out, the intellectual property sounding design and build is very different and is where the difference and value lies. the fact that one person/company makes multiple brands makes no difference.

    they have the infrastructure, know-how and cash. but for Chinese cream companies to compete with European/US brands they need equally as well designed and secure intellectual property. Value is in innovation not replication.

  • Anonymous Monday, 20 February 2017, 4:27 pm

    Are the top of the line Treks no longer made in Wisconsin?

    • The Inner Ring Monday, 20 February 2017, 4:40 pm

      Some are yes, you can visit the Trek website and filter the roadbikes for “Made in USA” and there’s at least one model of the Madone, Emonda and Domane.

  • Anonymous Monday, 20 February 2017, 5:55 pm

    excellent article, thanks.

    This bit is very important: “Quest has “silos” of staff with a set tasked with R&D, manufacture and service for Trek; and another silo of staff doing similar roles for Canyon.”

    It’s the same for MOA (kit): pages.rapha.cc/stories/moa-sport

    And Velo Saddles: cyclingtips.com/2016/04/why-stella-yu-is-the-most-powerful-woman-in-the-cycling-industry/

  • Nate King Monday, 20 February 2017, 6:25 pm

    Unfortunately I’m almost entirely certain the premise of the article is incorrect. While Trek does indeed build some bikes with Quest, Contador’s Emonda (and the rest of their RSL road line) is laid up in Wisconsin.

    • The Inner Ring Monday, 20 February 2017, 8:32 pm

      I couldn’t tell which version of the Emonda Contador was on (and wondering about the weight) so it’s possible he’s on a Quest-made one. Also don’t think the Trek TT frames they used in the race have the Made in the USA label.

  • thesteve4761 Monday, 20 February 2017, 6:47 pm

    Curious how much longer those photos stay on the OEM’s page…..

    • anon Monday, 20 February 2017, 8:52 pm

      not long, i would wager

  • anon Monday, 20 February 2017, 8:51 pm

    not long, i would wager 😀

  • Larry T Monday, 20 February 2017, 8:56 pm

    I love these posts! So many sacred cows getting speared and marketing BS exposed. When I read these stories I wonder what the public would think if an Italian bike tour company (just for the sake of example) advertised and sold “ITALIAN” cycling vacations – but when you arrived in Italy, you were instead put on another flight and landed in, oh, say China (for the sake of example) while the tour operator insisted that your experience would be in every way equal to the promised “Made-in-Italy” tour but by producing in China you’d receive far better “value”, when the real result is the tour operator’s profit margin would be greatly enhanced?
    “Designed in California” “Adrenalina Italiana” “Designed in Germany”… how many other designed-to-confuse labels are out there?

    • Nate King Monday, 20 February 2017, 9:00 pm

      Top-end carbon frames are very often exercises in badge-engineering. There are few production brands actually designing (and/or building) their own bikes anymore – one can count them on two hands. Quite ironically, Trek, highlighted here, is one of those.

    • Anonymous Monday, 20 February 2017, 11:09 pm

      I can’t agree with you Larry T.

      I understand why you say that, but I’m friends with a guy who produces very high end road bikes.

      He does not own a factory that can knock out frames. So he gets them done in the Far East. But he is incredibly specific with the factory about what he wants. And his frames are unique.

      Now when you have a very large company, like Trek or whoever, maybe they have asked themselves at what point do they take the bike production in-house. But that’s a huge operation.

      I’m sure there are some bikes that come out almost identical to different brands. But that will be from someone copying someone else, and yes perhaps using the same factory. But this is not a case of slapping a badge on any old frame.

      Also read those other articles that someone linked to about saddles and kit. It does make sense.

    • Andy W Wednesday, 22 February 2017, 12:59 pm

      Not quite Larry’s example, but I felt very short-changed at the end of last year to go to Edinburgh (Scotland :o) and book on a ‘ghost tour’ where you get walked around graveyards in the dark and told scary stories of murders and grave-robbers…
      …except that when the guide turned-up, she was dressed in tartan, sure, but had a strong American accent ! A US tourist on the trip asked where she was from, turned-out they were from the same state, less than 100 miles apart.
      Hmm, hardly the authentic experience…I wanted Scottish, not Disneyland

    • ZigaK Wednesday, 22 February 2017, 4:06 pm

      Google tianmen mountain road. I would not mind the mix up.

    • Andrew Friday, 24 February 2017, 2:59 pm

      When I bought my most recent bike (carbon, but not top end) it was advertised as “Designed in Britain”. I took that as definitive proof it would be *made* in the Far East and it didn’t bother me in the slightest: that’s where the expertise is. Sure enough, the box had the country of original plastered all over it – and it wasn’t the UK.

      If it had been sold as “Built in Britain” I would feel cheated. But not as cheated as a friend of mine who bought a Ritte believing it to be something other than what it is was: a cheap, wobbly open-mould frame given a nice paint job and US branding.

  • Alpen Monday, 20 February 2017, 9:12 pm

    Canyon and Cervelo used to be made under the same roof and it seems not well enough ‘silo’-ed as they had some patent spats with Cervelo stealing Canyon’s ‘maximus’ seat tube and Canyon stealing some aero bits (http://www.bikeradar.com/news/article/canyon-and-cervelo-settle-legal-battle-28941/). They settled and moved on but certainly interesting to see how much cross pollination there is. For example, the previous version BMC TM01 and Merida Warp were dead ringers.

  • TomH Monday, 20 February 2017, 10:09 pm

    “it even appears that Quest has “silos” of staff with a set tasked with R&D, manufacture and service for Trek; and another silo of staff doing similar roles for Canyon”

    I find the “silos” part hard to believe. I have decades of experience with semiconductors & microelectronics. Outsourcing semi manufacture to “foundries” , as they’re called, is well-established.

    A foundry at a given site has one set of process and manufacturing engineers. Reputable foundries and sub-cons go to great lengths to protect customer IP from one another.

    • thesteve4761 Monday, 20 February 2017, 10:41 pm

      Tom,

      Doesn’t your third paragraph contradict your second? Why could Quest’s “great lengths” not include having separate teams working on Canyon and Trek’s projects?

      From my relatively short experience within high end contract manufacturing for wheel components, the “silo” idea is definitely in use.

      • TomH Tuesday, 21 February 2017, 8:10 pm

        Well, perhaps my long experience in the electronics field is not how bike manufacturers do it.

        Analogies are often imperfect, but if I were to apply the “semiconductor foundry” model to bike frames, it might look like this:

        – Designer (eg, Trek, Spesh, etc) specifies tube shapes, geometry, carbon modulus, target weight, etc. If the designer is _exceptionally_ well-versed in composites, may also provide guidelines for layups, resins, etc.
        – Those prelim specs are reviewed and iterated with Mfr’s process engineers to strike a balance between cost & performance.
        – Mfr’s process engineers work out details of fabrication, tooling, curing conditions, QA procedures, etc.
        – Because different, multiple process & manufacturing flows are very expensive to support & develop, all process engrs & management try to keep # variations minimized. This reduces costs , improves quality, and keeps production throughput up. Contrary to popular conception, high volume manufacturing is more amenable to consistent high quality than low volume — learning curve is faster & cheaper.
        You would _not_ want an Intel microprecessor in your computer, if Intel only made a few 100K of them per year! 😉
        – The _same_ group of process engineers support all the frames (of same general type & price point) made by Trek, Spesh, etc. Anything deemed proprietary is never revealed to the other customers. The process engineers apply their general knowledge & experience to all customers. Eg, “We don’t recommend that modulus carbon in bottom brackets of that shape, because we think it will crack”

    • The Inner Ring Tuesday, 21 February 2017, 9:57 am

      “Silo” was my description but they do have staff working for each brand, Quest staff are specifically on, say a Canyon project. It’s possible too there’s overlap in the process, for example on the factory floor when making a pair of Canyon integrated bar/stems the workers might make Trek/Bontrager ones the next week though.

  • Somers Tuesday, 21 February 2017, 12:59 am

    I wish I could see how many newbies commenting on this article are in PR departments at certain companies lol

  • Othersteve Tuesday, 21 February 2017, 1:35 am

    While working in a bike shop in La Jolla CA. back in the day. We were asked to “help” the then 7-eleven team by an wrenching bikes for them while they were training here. They were riding Huffy bikes! Well of course they were not huffy bikes but various others http://www.cyclingnews.com/features/historic-pro-bike-andy-hampstens-1988-7-eleven-huffy-giro-ditalia/

    A bike is just a tool. just go out and ride I don’t care who made it unless its steel then it matters.

    • The Inner Ring Tuesday, 21 February 2017, 9:51 am

      A lot of those practices stopped when carbon frames came out. Until then a set of welded/brazed tubes could easily be made to look like another, it’s a lot harder now to mimic a frame. It also seems like something that could pass by in older times but with the internet now the slightest novelty becomes a talking point online.

      • Larry T Tuesday, 21 February 2017, 3:05 pm

        I dunno that it’s so hard to make a made-to-measure carbon frame that looks close enough to the ones they sell to fool most observers. Rather than buying pre-made tubes, “builders of trust” can create their “tubes” from sheets of carbon, so they can pretty much make any shape they want. There’s much more to this than simply buying and gluing pre-made tubes together.
        The bike Ballan won his rainbow jersey with was supposedly built by one of the Italian “builders of trust” while Nibali was rumored to be riding a bike last year with Big S decals on it that was custom made for him. This practice was certainly easier back-in-the-day of steel tubes and lugs (but the truth came out now and then as I know from a personal experience in 1988) but the extra cost to make something that fits the big star and fools the punters is nothing compared to the millions being spent on marketing efforts. The pro (as many did then) may pay for it out of his own pocket to boot! The biggest effort in all of this is probably keeping it out of the public eye?

        • lee kaliski Wednesday, 22 February 2017, 8:07 am

          Well, don´t be sure….I´ve a friend that has worked for 3 professional road teams (from the very biggest to pro-conti) and he assures me when asked there are no “special”s anymore….logistically it´s a nightmare and, as Innering states, since the days of carbon frames this has virtually died out. I myself have a frame made my a builder who used to do this and build frames for the pro peleton when they were rebadged but those days are all but done and dusted. Also if you look at something like the way out bike set up of Adam Hansen that was recently on the net surely this would be an example of someone that would have a frame built for them if that was the case?….I think he´s earned it by now 😉

          • Larry T Thursday, 23 February 2017, 12:05 am

            “…since the days of carbon frames this has virtually died out.” My point is this is simply NOT true, though anyone who works (directly or indirectly, like your “friend”) for a firm who profits from the myth that “the pros ride the exact same thing you could buy”would like you to believe otherwise.

          • NK Thursday, 23 February 2017, 12:24 am

            Depends. “made to measure” is harder than not – cutting new molds, new layup schedules, etc, all far more costly modifications than in the days of metal bikes. That said, if the bike sponsor has the wherewithal, expertise, and $ to make it happen, many still do. For example, Orbea was laying up Bouhanni’s bike with an enormous amount of fiber for extreme stiffness in sprints (note: In my experience racing on Conti squads, field sprinters are always obsessed with stiff bikes, whether or not it actually aids performance is another matter). While this didn’t require a change to the mold, it’s still a fairly tricky thing to pull off. Trek did the same with their Domane and Fabs, building the RSL model with extremely low geometry/low quantities, and only from 54cm to 62cm. The 56cm bike has a 12cm headtube.

          • Larry Theobald Thursday, 23 February 2017, 9:03 pm

            NK – This is a marketing-maven MYTH, that molds are too expensive for custom, made-to-measure bikes so that must mean the big stars couldn’t possibly ride anything else. “Builders of trust” create made-to-measure bikes the old fashioned way, by joining together “tubes” they create from sheets of carbon. They can make those “tubes” in any size or shape they desire and end up with a bike whose external shape looks just like the bike your local bike shop tells you is “the exact same bike your hero wins on”. This mythology reminds me of the original myth about carbon fiber bikes in general – they were touted as using this wonder material so that all the coveted ride characteristics could be designed-in since the material could be “tuned”. But in the current marketplace we see more gizmos to take the sting out of their ride than ever before. From “Zertz” to “Cobl gobl-r” to flimsy seatposts that bend like flagpoles in the wind or seattubes split into two pieces, etc. etc. And let’s not forget the gel bar tape, gel saddle, gel insert in the cycling shorts and all those other band-aids. All that seems to suggest those early claims were little more than marketing-maven BS. Same as it ever was.

          • NK Friday, 24 February 2017, 1:36 am

            Larry – Lugged, tube-to-tube construction techniques that you’re alluding to are indeed quite easy to build with custom geometry (one could – frighteningly – do it in their garage). With prepreg, premade tubes, it’s typically a second-tier manufacturing technique (unless you’re dealing with filament-wound tubes, see: Festka) that results in a heavier frame for a given stiffness, along with poorer ride quality. There are a couple Italian manufacturers who are still doing it, and very few frames floating around the peloton (note: FEW).

            But no, cutting a custom mold/designing a layup for- say, a Dogma, a Venge, or a Madone – for a rider (any rider) isn’t cost-effective. Almost ever. It’s why it doesn’t happen. Carbon is indeed the highest-performing material one can build a bike out of, but it requires a very high level of engineering and manufacturing prowess to pull off well (emphasis on that last word – as I mentioned, anyone can build a shitty bagged carbon frame in their garage), which naturally results in a need for scale.

            And for what it’s worth – I ride a custom titanium frame.

          • Larry T Friday, 24 February 2017, 4:00 pm

            NK – I promise I’m done with this topic after this BUT how do you know how many or FEW made-to-measure frames the pros are riding that were made by “builders of trust”? I don’t know myself – I’m just trying to poke holes in the myth that because the production bikes for sale to the punters are all pretty much created in Asia with giant molds it’s impossible for the big stars to be riding something else. Nobody is going to talk much, certainly not the bike brands who spend millions to get their names on the downtubes nor the “builders of TRUST” who make the made-to-measure replicas, but the stories eventually leak out as Ballan’s did. Amazing things can be done by skilled artisans making “tubes” from carbon sheets over mandrels – it’s NOT buying premade tubes and simply gluing them together! Finally (I promise!) this disclaimer: We are working with an artisan-builder in Italy to add some bikes to our Italian rental fleet http://fm-bike.com/laboratorio/filosofia/ and will be helping out at the Favaloro stand at NAHBS next month where our prototype will be on display.

    • SeeingElvis Thursday, 23 February 2017, 3:25 pm

      I believe they rode the great bikes handmade by Ben Serotta for a few years. The first really nice steel bikes I owned.

  • Cilmeri Tuesday, 21 February 2017, 1:35 pm

    I understand (from the cycling podcast) that Tony Martin joined Katusha because he wanted to ride a Canyon bike given their superiority in TTs. So presumably this backs up the point that although some bikes are made in the same factory they are different bikes, otherwise Martin would’ve been happy with a Canyon or a Trek.

    • Larry T Tuesday, 21 February 2017, 3:12 pm

      And if you believe that I have a bridge for sale! I find it interesting that almost every pro says whatever bike he’s riding this year is the greatest while the other brand he rode last year ranges from not as good (“This year’s bike is a huge improvement!”) to a piece of crap, (though that doesn’t come out until he’s retired in most cases) while when he was riding it we heard nothing but how great it was. These guys are pros, they’re paid as much to endorse equipment they use (even if they’re not actually using it) as for their results. Same as it ever was.

      • Othersteve Tuesday, 21 February 2017, 5:42 pm

        + one, riders only care when a mfg. pays to fund a team for them ala the Big S and
        Segan and his entourage.

      • J Evans Wednesday, 22 February 2017, 10:29 am

        Yup, I remember Tom Boonen saying about a year ago that disc brakes were a complete waste of time.

      • Andrew Friday, 24 February 2017, 3:08 pm

        It’s not only the pros, either.

        I know someone who spent last year bigging up the (open-mould reselling) brand ridden by her offspring’s amateur race team, on every social media platform she could find. Said bikes were actually (according to most online reviews from ordinary users) a pile of overpriced junk; and coincidentally or otherwise, this year the team has switched to one of the big brands.

    • Andy W Wednesday, 22 February 2017, 1:09 pm

      Do we really believe there’s a great deal of difference between any of the bikes in the pro peloton ?
      The marketing men will tell us so of course, but really ?
      They might want the contact-points to fit them (especially saddles and shoes, where they regularly ride what they prefer even though another brand is team sponsor), but which frame, nah.
      Even groupsets, they ride Shimano, Campag or SRAM (even FSA) depending what the team gives them

  • PaulR Tuesday, 21 February 2017, 2:04 pm

    The situation is similar to iPhones/various Android phones/Blackberrys (if they still exist) all being manufactured in the same factory in China. As well as different sportswear and fashion clothing/shoes all being manufactured at the same factories.

    The majority of the brand-names we buy are just that – a brand-name. Hardly any actually manufacture the products they sell and are really just marketing companies with a bit of design input.

    • CA Tuesday, 21 February 2017, 8:11 pm

      Exactly, globalisation at it’s finest. Although if you ask Donald Trump, he’s going to bring ALL these manufacturing jobs back to the US.

      Now, how to find someone who will pay $4,000 for an I-Phone manufactured with expensive, lazy, slow, unmotivated, unionised workers in Alabama?

      • gabriele Tuesday, 21 February 2017, 9:44 pm

        Yeah, sure, that roughly one-half of total manufactured commodities produced in the world which are built under labour and social conditions comparable to Alabama – or way better – is made of luxury goods, and – on top of that – prices are essentially depending on costs, especially wages… suuure.

        Let’s stick to the real world where USA, Japan, Germany, France, Italy and UK *do indeed* cover 45% of world manufacturing (if you want a 50% you can add Canada, Switzerland, Spain and the Netherlands). And, apparently, those expensive, lazy, slow, unmotived, unionised workers tend to create more $ per capita through manufacturing than Chinese, Indian, or Mexican ones (same goes for other low wage / low rights countries like Turkey, Indonesia or Brazil).
        Curiously, getting rid of Unions and dropping wages doesn’t look to have any real favourable effect in terms of manufacturing growth, but people find a lot of excuses for that.

        No need to stress the quantitative importance of China, and Taiwan or South Korea are relevant actors, too (especially if you look at per capita output – world impact is similar to most European countries), but it’s not like if you don’t produce there, then the commodities price rockets out of the roof.

        “Competitiveness” classifications, 2020 top manufacturers lists and so on are mostly BS which hopes to become self-fulfilling, home-cooked by industry associations or the likes of Deloitte. I’d suggest UNIDO data, or, for instance, this UK Parliament report:
        researchbriefings.files.parliament.uk/documents/SN05809/SN05809.pdf

        Things are at changin’ and changed a lot, indeed, that’s obvious. But it’s not because some production processes aren’t affordable anymore. Most of what is produced and sold in the world still comes from those processes.
        Let’s call it uncontrolled escalation of profits, or something like that, instead (then, most added value from low wages countries manufacturing ends up elsewhere…).

        • CA Tuesday, 21 February 2017, 10:47 pm

          Thanks for the economic lesson, I’m impressed, I thought you only knew cycling!

          Sorry, but I’m not going to keep this argument going, but there is a reason why unskilled labour is moving away from these richer nations. And that is because of the nature of the labour, which is a lot less cost efficient than the Asian nations mentioned in Inrng’s post.

          • gabriele Wednesday, 22 February 2017, 11:20 am

            There’s a huge difference between “cost efficient” (actually exploiting the existence of *very* separate markets for goods production and goods sales, besides a good lot of politically generated distortion, both on the local and on the global scale – or do you think that the difference between South Korea or Taiwan and most countries in the area is pure chance?) and “unmarketable”, which is what you were suggesting above.

            Sure, there’s a reason for global change in manufacturing distribution: short-sighted priority to short-term profit. Very often true systemic costs aren’t immediately apparent and, anyway, the private companies goodfellas will charge them to public coffers (hey, this look very familiar! Like, the past ten years or so).

            Nuclear energy or the car industry are excellent examples of how *the nature* of things tend to work. Profit-driven? Better said, [social] power-driven decisions to benefit a few.
            (whatever is deemed *natural* is more often than not the result of highly ideologised perspectives and cognitive bias).

            But I won’t keep this going, either.

          • J Evans Wednesday, 22 February 2017, 12:23 pm

            Hear hear, Gabriele.

    • TomH Tuesday, 21 February 2017, 8:20 pm

      The chinese factories _assemble_ the phones and can provide manufacturing expertise to reduce costs and manufacturing defects, but make no mistake, the design from system level to component level is done exclusively by, say, Apple. Apple now even designs many of their own digital/analog chips having the complexity of an intel uP. Appple even bought anotehr company in 2008, P.A. Semi, for their design expertise.
      There are also many other components sourced from Korean, German, etc, semiconductor mfrs as well as companies that design but outsource fabrication (eg Qualcomm). The global food chain for phones and infrastructure is incredibly vast.
      The “value add” by the chinese assembler, eg Foxconn, is one of the lowest of all suppliers in the whole process.

      An imperfect analogy is, I prefer to _assemble_ my own bikes — but I am buying components made by other companies. I certainly don’t “make” my chains or dearailleurs! 😉

      • TomH Tuesday, 21 February 2017, 8:23 pm

        add to my previous comment – – the very cheapest and most generic of phone brands will indeed do very little design or engineering of their own. The equivalent in bike-speak would be “open mold frames”. There’s a place for it. People in Indian villages aren’t going to buy $800 iphones when their daily average wage is $1 (or whatever)

  • Hip hop reference yo Wednesday, 22 February 2017, 11:06 am

    A firm called Quest. Nice

  • Andy W Wednesday, 22 February 2017, 1:21 pm

    Quote INRG
    “Anyway the point here is you can have some of the best products in China alongside the fakes and fails so the label remains altogether less reassuring than, say, Made in Switzerland”

    Perhaps you’d like to go onto a watch forum and debate what “Swiss Made” on the front of your mega-expensive watch : the difference between in-house movements and bought-in ebauches either used plain or customised by oooh stamping the brand name on the winder rotor

    For some brands, it’s exactly the same as buying a frame from China, buying the components from Taiwan, screwing them together in Italy and then saying it’s an Italian bike – the components are cheap, the finished product RRP is high, hence 60% of the value is that assembly in Italy ?

  • Anonymous Thursday, 23 February 2017, 4:33 pm

    I love the bike I paid for. However I will praise the bike you pay me to ride even more! even though I wouldn’t be seen dead parting with my own cash to buy one!

  • Ian Friday, 24 February 2017, 12:53 pm

    Pretty interesting. Will bear this in mind when renting my bike from Fat Lama

  • fatclimber Tuesday, 28 February 2017, 10:48 am

    Working in an industry (high-end audio) where the prices would make cycling fans blanche and OEM is a way of life, I can easily understand the notion of separate development strands within a single manufacturer. Quite often those “silos” extend only as far as the master files on the CAD system. Is that a problem? Manufacturer client relationships exist on trust and while that can be abused it’s only a sensible course once a manufacturer wants to set up on their own: word gets round…

    Perhaps the most interesting example exists in Formula 1, surely one of the most technologically competitive sports there is. For years TAG supplied data diagnostics to virtually the entire grid (not sure that they still do) with each team having a separate work station in a single, open plan office. In this case the silos consisted of desk dividing screens.

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